Growing investments in digital transformation, the shift to cloud-based services, and the adoption of new-age technologies are all boosting the tech industry’s growth prospects. While this could be the right time to invest in the space, the high-interest rate environment could have varied impacts on different tech businesses, making it risky to invest in specific stocks.
Therefore, a relatively safer approach to capitalize on the industry’s growth prospects could be to have exposure to buckets of tech stocks by investing in promising tech ETFs. To that end, Vanguard Communication Services Index Fund (VOX – Get Rating), Technology Select Sector SPDR Fund (XLK – Get Rating), and Vanguard Information Technology Index Fund (VGT – Get Rating) could be wise portfolio additions now.
Before diving deeper into these ETFs, let’s discuss what’s happening in the tech space.
Enterprises are swiftly transitioning from traditional software applications to cloud-based software services. Cloud technology aims to provide rapid, scalable access to computing resources and IT services. Moreover, adopting emerging technologies like generative AI will likey boost the tech industry’s growth.
Software companies with subscription-based business models are expected to benefit from integrating generative AI into their applications. Goldman Sachs estimates that the total addressable market (TAM) of the generative AI software is approximately $150 billion. Additionally, the move to 5G wireless networks is underway. The increased bandwidth offered by 5G could enable several industries to shift to autonomous systems.
Gartner expects worldwide IT spending to grow…
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